BERKSHIRE BUSINESS QUARTERLY

For the Keator Group in Lenox, Mass., helping people reach their goals is all in a day’s work

Written by LesLey Ann BeckPhotoGraPhy by Ogden gigLi

very wealthy client in Connecticut called Matthew Keator in tears one day in the late fall of 2008. She had been watching the news on tV and was afraid she had lost as much as sixty percent of

her money. he pulled up her portfolio and explained that the conservative allocation they had established for her was

working. “but if you just focus in on what you’re seeing on television, you’re going to pull the ripcord, and you’re going to pull it at the wrong time,” Matthew said.

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MeMbers of the Keator Group, froM left, DaviD, Matthew, sheila, anD freDericK Keator.

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The last months of 2008 were a busy time for the Lenox, Massachusetts-based Keator Group, financial advisors managing $459 million for hundreds of clients across the nation, as many of their clients wanted to check in more often. The goal-based investment plan-ning and client-centered focus that the Keators—founder Sheila Keator and three of her sons, David, Frederick, and Matthew—utilize helped them and their clients weather the market downturn. “Oftentimes we find people are taking unnecessary risks in the market when it’s not needed to meet their goals,” explains

Matthew, 37. By utilizing goal-based planning, the brothers believe, a client’s exposure to risk can be mitigated.

This is not to say that people who had accounts with the Keator Group didn’t lose money during the market downdraft. “Of course our clients lost some portion of their portfolio,” Sheila says, “because, no matter what they were exposed to, the market collapsed in every sector.” The Keators advise caution when listening to the media. “If you ever got on an eleva-tor and it said ‘plummet’ or ‘soar,’ which one would you push?” Frederick, 42, asks. “I’ve been doing this almost twenty

years,” he says, “and there’s always been a crisis, and the media is always spinning something. This time it was different because munis, gold, corporate bonds, stocks, everything was down. People … were hurt in 2008 and into March 2009.”

They had a number of clients who wanted to sell, but “we helped keep them on track to reach their goals,” says David, 47. “It’s always back to being goal-centric.”

“I’ve been in a situation personally, where we’ve risked and lost. I’ve had that personal, painful experience,” Sheila says. “In all my relationships with all my

clients, I always remember what it’s like to risk and to lose. And I have worked passionately to help protect people from having that happen to them. I couldn’t say it more clearly or be more earnest.”

the matriarch of the family and founder of the business, wearing a

tailored suit, her gray hair in a smooth bob, takes a seat in one of the small sitting rooms where a couch and two armchairs face a wall of awards and diplomas. Even though her three sons are now the senior partners, it’s clear that Sheila Keator still

wields a great deal of influence.A born storyteller, Sheila traces her

strong work ethic to her father, George Washington Nesbit, who came from a large, entrepreneurial family in Pittsfield. His mother, Elizabeth Reynolds Nesbit, started a livery stable with her sons, and the livery stable grew to be Nesbit’s Garage and Nesbit’s Hotel. Eventually there was a coal business and an oil business and a grocery store. Sheila’s father, the first in his family to go to col-lege, taught Latin and Greek before tak-ing over the grocery business. Sheila’s mother, Jane Daley Nesbit, graduated

from Albany Business College in 1910 (an unusual achievement for a woman in that era) and came to Pittsfield to work as an executive secretary, before marrying into the Nesbit family—and the family business.

Sheila graduated from the College of Our Lady of the Elms and taught school for two years before marrying George Keator. With her new husband and what would eventually be a family of eight children, they moved around for a few years, until in 1967, George and Sheila Keator settled in the Berkshires and started a business.

The enterprise, one that Sheila de-

her thr Sons33Matthew Keator uses Multiple coMputer screens to Keep tracK of client portfolios while watchinG the ups anD Downs of the MarKet.

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How Sheila Keator Does It

Your favorite productivity tools: BlackBerry

How do you organize your time? A written calendar

Favorite business books: Too Big to Fail by Andrew Ross Sorkin; Free Lunch by David Cay Johnston; and The Big Short by Michael Lewis

Have you had a mentor? My mother Jane Nesbit and my first manager at Kidder Peabody, Bill Guerin

The best job you ever had: The eleven years I spent as treasurer and vice-chair at the Massachusetts State College Building Authority and the one I have now

The best business advice you ever got: “You’ll never go wrong if you do the right thing.”—George Washington Nesbit

Most recent business purchase over $5,000: The property at 218 Main Street in Lenox, Mass.

Business-related publications you read: Barron’s, Wall Street Journal, New York Times

Business-related websites you read: Bloomberg, MarketWatch

Berkshire-based business you most admire: All who make a community commitment

What metrics do you use to measure success? The number of referrals from satisfied clients

Has technology changed your business? Technology certainly has improved productivity.

sheila anD DaviD Keator worK in the shareD office space they call their “laboratory.”

scribes as “basically a Kinko’s before there was a Kinko’s,” was quite success-ful, and by 1972, they had operations in Vermont, New York, and even New Jersey, as well as Massachusetts. It was a publicly traded company, “just a little tiny compa-ny that went public to raise some money to expand the business,” she says. And then the recession hit in 1974, and interest rates went to eighteen, nineteen percent, she re-calls, and “No matter how hard we tried, we just couldn’t keep it together.”

They were left with what Sheila describes as “a whole bunch of print-ing equipment,” so, they started a little newspaper called the Shopper’s Chance.

Her husband had taken a job that re-quired him to be on the road, so Sheila ran the newspaper. It was a family effort; Sheila sold the advertising and David, at sixteen, did the typesetting after school. At age eleven, Frederick’s job was to de-liver papers up and down North Street in Pittsfield. Eventually the North Adams Transcript bought them out.

Sheila then took a job selling debt-collection systems, and “the next thing you know, I’m an area manager and then a regional manager.” To sell the debt col-lection service, she would go to Albany or Worcester or Springfield, to one of the large hotels. “I would stop at the bank

and get three or four rolls of dimes, and I’d stand in the lobby and drop dimes in the phone and call people,” she says, to set up appointments.

And then a family friend suggested that Sheila would make a good broker. The next step was an interview with Kidder Peabody. “This is the old days now, thirty-one years ago to be exact,” Sheila regales, “and the guy said to me, ‘Do you think you could make cold calls?’ I sat up and I put a roll of dimes on his desk. That’s a true story.”

Sheila had a few strikes against her: she was forty-two years old, she had eight children, and she was a woman.

But she knew something about the mar-ket and she certainly wasn’t afraid to make cold calls. “That’s all you did in those days, smile and dial. That was the business,” she laughs. “It’s a whole different world today.” Kidder Peabody hired her and sent her to New York for training, on the floor, with the traders, and in all aspects of the business. She worked in the Pittsfield office, a satel-lite of the Springfield operation, rising to vice president, a significant accomplishment for a woman at that time.

In 1987, Sheila left Kidder Peabody and joined First Albany Corporation, a boutique brokerage with four hundred fifty brokers; she went to work in their Pittsfield branch

office, and began to grow her business. Over the next few years and through various merg-ers, Sheila’s sons came to work with her. Frederick graduated from Sienna College, worked at First Albany as a syndicate trader, and joined Sheila in her business in 1994. David graduated from Fordham University and then earned his master’s in organization-al communication, spending ten years in tax planning and wealth transfer before coming on board in 1998. Matthew graduated from West Virginia University and put in his time as an investment advisor in Washington D.C. before joining the family business in 2000.

In 2005, the three brothers bought the business from Sheila and formed the Keator

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Group, LLC, an independent wealth management firm. The advisors are affili-ated with Wells Fargo Advisors Financial Network, which provides their clearing firm and other necessary services.

“It never dawned on me,” says Sheila, 73, “that one of them would join me in my business.” But join they did, all three, and by utilizing a client-centered philosophy somewhat unusual in their industry, this family firm is a model of success.

A multigenerational family part-nership like that of the Keators is not as unique as it used to be, says Diane Gabriel, managing director of the branch network for Wells Fargo Advisors

Financial Network. “However, what does separate them from others is that the parent is a woman advisor, which is still somewhat unusual in the industry where approximately only fifteen percent of the advisor population is female. Sheila was and is a trailblazer in the industry,” Gabriel asserts. “She joined at a time when women represented less than ten percent of the advisor population.”

fter many years in Pittsfield, Massachusetts, the Keators

moved the firm to the meticulously renovated historic building that used

How The Keator Brothers Do It

Your favorite productivity tools: DAVID: BlackBerryFREDERICK: MS ExcelMATTHEW: Telephone

How do you organize your time? ALL: Outlook calendar

Favorite business books: DAVID: Blue Blood and Mutiny: The Fight for

the Soul of Morgan Stanley by Patricia BeardFREDERICK: The Paradox of Choice: Why

More Is Less by Barry SchwartzMATTHEW: Outliers: The Story of Success by

Malcolm Gladwell

Have you had a mentor?ALL: Our parents

The best job you ever had: ALL: Other than being fathers and husbands,

the one we have now

The best business advice you ever got:ALL: “Take care of your clients and the business

will take care of it self.”—George and Sheila Keator

Business-related publications you read: ALL: Barron’s, Wall Street Journal, New York

Times, Business Week, Forbes, the Economist

Business-related websites you read: ALL: Bloomberg, MarketWatch, MSNBC,

CNBC, CBOE

Your iPod playlist includes: DAVID: Peter Cincotti, Usher, Billy Joel FREDERICK: “The Things We’ve Handed

Down” by Marc Cohn and “It Happens” by Sugarland

MATTHEW: Dean Martin, the Beatles, Metallica, the Pogues

Berkshire-based business you most admire:

ALL: Successful, intergenerational family businesses such as Crane & Company, Guido’s Fresh Marketplace, the Fitzpatrick Companies, L.V. Toole Insurance Agency and many others

What metrics do you use to measure success?

ALL: When clients are successful in reaching their personal goal we are successful.

Has technology changed your business?

ALL: Our website has allowed us to communicate better to the public who we are and what we do.

to house the Lenox 218 Restaurant in July 2008. It resembles a gracious home rather than a typical office, a very de-liberate choice. “We take a tremendous amount of pride in where we work,” Sheila says, “and I think that tells you a lot about the pride and care we take for the people with whom we work.” All four Keators live in Lenox, and, says Frederick, “When we’re not home, we’re here. We want it to be comfortable and inviting and warm.”

In the large conference room, a couch flanked by two green leather wing chairs forms a cozy seating area facing the massive fireplace. The walls are a

deep red, and two Oriental carpets warm the hardwood floor. At the other end of the room is a table large enough to seat eight to ten comfortably, shadowed by a tall antique hutch with curtain-lined glass doors; the doors conceal a huge flat screen and a computer, set to stream financial information or details of a cli-ent’s portfolio.

“The financial world is totally differ-ent from when the broker was king,” Sheila says. “This is a very client-centered in-dustry, if you are going to be successful. The reason that we bought this building and decorated the way we did is we want the client to feel like they’re king.”

The Keator Group offers wealth man-agement for individuals and institutions, working with approximately three hun-dred and fifty families or clients, of whom only about 20 percent are from western Massachusetts; the rest are spread across the United States, and some are even farther afield, including one in Bolivia. A typical account is in the neighborhood of $900,000; typical net worth for clients is five to ten million dollars.

The staff is fairly small, just six full-time employees—Sheila and her three sons; Sheila’s nephew Stephen Nesbit is the branch administrator; and Michelle Wohrle, the operations manager.

her thr Sons33freDericK, left, anD Matthew Keator MaKe use of the larGe coMputer

screen in the conference rooM; they can Display Details of client portfolios or streaM financial inforMation froM the MarKets .

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Keator Group clients don’t work ex-clusively with just one of the partners; each of the Keators has access to every account. Because they have particular specialties, that knowledge can be lev-eraged for their clients. “We’re all row-ing in the same direction for the clients,” Matthew says. When the phone rings, it doesn’t matter who picks it up; the cli-ent can speak to any of the family.

“The easiest way to define our busi-ness, I think, is as a family working for families,” says Frederick. “When we first sit down with a prospective client, we do a lot of talking about the whole client, not just their money. Money is just the means to an end. What is it you want to accomplish with your money? …We talk about the needs of the family and the needs of the individual.”

This is, historically, a very unusual approach. “Today,” Sheila says, “I be-lieve it’s a necessary approach.”

Their strength, David says, “is help-ing people understand what they have, where they’re going, and how to get there.”

“A good person with integrity and smarts can manage stocks and bonds and we do that,” Sheila emphasizes, although the service the Keator Group provides for its clients isn’t just which stock or bond to pick—it’s also when to pick it, and when to hold on. “But it’s the other stuff that comes out when we’re talking. What can we do? How can we get there? Tearing the whole financial picture apart and showing them what they have and how they can potentially use it to their advantage. It’s the personal approach that makes a difference.”

Two of the Keators are among the

highest-ranked finan-cial advisors in the Commonwealth; Sheila was number fifteen on Barron’s list of Top Financial Advisors in Massachusetts in 2009; and Frederick was named to the same list in 2010 in the num-ber twenty-four slot; the only firm on the list west of Worcester. The group was named to Research magazine’s list of Top Ranked Family Investment Teams in 2006, 2007, and 2008, and, in addi-tion, Sheila was named as one of Barron’s Top 100 Women Financial Advisors in 2006, 2007, and 2008.

“It’s a business of constant measure-ment,” Sheila avers. “We … are being mea-sured by our peers in the industry, and our clients are constantly measuring how well they’re doing.”

at the Keator Group, cli-

ents are ushered into one of the two sitting rooms or the large conference room; they never see a tra-ditional office or a desk. But across the hall from the conference room in another large open room, the one the Keators call their laboratory, there are rows of L-shaped desks (Sheila, David, and Matthew sit on the left, Frederick and Stephen Nesbit are on the right), nine computer screens, ringing tele-phones, and jangling BlackBerrys. “It’s all data-centered, it’s all client-cen-tered,” Frederick emphasizes. Once the Keators step through the doorway into their work area, the suit coats come off,

sleeves are rolled up, and they are all busi-ness. They talk to each other across the room, looking up references on the Internet, sup-plying answers for cli-ents on the phones, and exchanging opinions on an account or the ac-tivity in the markets.

The three brothers own the Keator Group now, but the team still operates very much as a foursome. “Mom is the founding partner,” states Matthew. “We’re all sitting here because of her.” Sheila’s con-tinuing importance to the company cannot be overestimated. “As the Irish brothers are go-ing at it, duking out a policy, Mom can come in and clean house,” Matthew laughs. “She’s not an owner, she’s more important. She’s the mother. She has a lifetime contract with us.”

When decisions need to be made, the four say that they work to consensus. “If you go to a vote,” says

Matthew, “then you always have some-one who loses.”

“In the process of work to consen-sus,” David adds, “you don’t always get to the answer as quickly, but it’s typically a better answer.”

“It can be hard sometimes, but that’s the nice thing about working with fam-ily,” Matthew continues. “You can roll up your sleeves and duke it out, but you know that you love and trust the person that you’re working with.” BBQ

Lesley Ann Beck is the editor of BBQ: Berkshire Business Quarterly.

THE RECIPEKeaTor Group, LLC218 Main St.Lenox, MaSS.413.637.2118www.keatorgroup.coM

A FULL TOOLBOXTalent, skill, knowledge, and experience are all important parts of any professional’s toolbox, but no one person can have expertise in all areas. Building a team of professionals who have a variety of specific skills will give your company an edge.

LOSE THE EGOSuccess in business is measured by goals achieved, not by corner-office status, and by clients well-served; benefits accrued to the greater community; and a business that grows through positive word-of-mouth.

WORK TO CONSENSUSIn making a group decision, taking a vote and following the wishes of the majority is common practice. But in a small group, working to consensus may be a better choice. Where there’s a vote, there is a loser; whereas if the group takes the time to work to consensus through discussion and compromise, there is no loser, and the final decision is stronger for having been reached through the approbation of the whole group.

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clocKwise froM top riGht, sheila, Matthew, freDericK, anD DaviD Keator

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